‘02 Legislature gets good marks from lobbyists

Several lobbyists say that business interests fared generally well in the Idaho Legislature this year – and agreed that lawmakers faced the most dire financial situation the state has seen in recent memory.
Last year, a major budget surplus led to cuts in personal and corporate income taxes. This year, lawmakers faced pressure to raise taxes to help make up for tax collections falling short of expectations as the economy weakened for most of calendar 2001.
“The Legislature faced the most serious financial problem in many decades,” said Steve Ahrens, president of the Idaho Association of Commerce and Industry. “Nobody even remembers the last time we had a situation like this.”
“They faced tremendous pressure from a variety of sources to raise taxes,” he said. “But they approached the state’s financial problems very much as a business would approach its own revenue problems. They cut expenditures everywhere possible, and they delved into one-time funding sources to an extent that would have shocked them if such moves would have been proposed six months ago.”
One plus, in Ahrens view, was that lawmakers retained last year’s tax cuts.
“When the economy begins to revive, we will come out of it faster than we would have otherwise, because those (2001) tax changes are in place,” he said. “The economic climate will be better because we will be paying lower taxes and will have more money to plug into their businesses.”
State budget problems “reflected very serious economic problems. The economy simply went into a ditch, tax cuts or no tax cuts,” Ahrens said.
Ray Stark, vice president of government affairs for the Boise Metro Chamber of Commerce, said last week that the Chamber hopes Gov. Dirk Kempthorne will sign a bill creating a $30 million state venture capital fund, and another that would earmark $50,000 of Millennium Income Fund (tobacco settlement) money toward continuing to analyze a model for small business health insurance.
“If the governor signs those two pieces of legislation, we would have had a very successful legislative session,” Stark said, “with preservation of last year’s tax reductions, urban renewal clarifications, city annexation improvements, repeal of term limits, clarification of development impact fees, litigation reform and authorization to construct the Idaho Place higher education center” on the east end of downtown Boise.
Will the economy, and tax collections, improve?
“We sense optimism on the part of our major companies, and this will translate down to our small businesses as well,” he said. “There continues to be strength in the call-center industry, and the military part of the economy. Prices continue to increase for computer chips, and this will benefit Micron Technology and many other companies in the metro area.”
Ahrens said the venture capital bill’s constitutionality is in question. “We have to pass it and find out if it’s constitutional. Idaho is in a particularly good position to have spinoffs and startups from established businesses like Micron, HP or the contractors at INEEL.”
A venture fund would provide needed new capital, and augment existing venture capital funds in Idaho, he said.
The legislative session was “so unbelievable, after just having a $315 million surplus the year before to what they faced this year with the economy down as far as it is,” said Randy Nelson, president of the Associated Taxpayers of Idaho. “If we continue to have more (negative) impacts, there are going to be some more decisions to be made, as to what the backup is for more mitigations.”
Some additional building projects could be delayed to help mitigate future budget shortfalls, he said.
“Hopefully we hit the bottom of this and start flattening, and come out of it,” Nelson said. “If we don’t, we have some really hard decisions to make next year.”
Pete Skamser, executive director of the Idaho Chapter of the National Federation of Independent Business, said NFIB opposed two health-insurance mandates, both of which were defeated.
One would have covered certain anesthesia and facility charges for dental procedures. The other would have extended coverage for diabetes education and supplies.
“State-imposed health-care mandates result in more and more small-business owners being forced to either decrease the health benefits they offer or stop offering coverage altogether,” Skamser said, noting that coverage is growing ever more expensive.
NFIB Idaho supports a new alternative dispute resolution law for cases involving less than $25,000. It will help small businesses avoid time-consuming, expensive lawsuits by allowing an appointed evaluator to work out compromises with attorneys from both parties in a dispute, Skamser said.

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